The Third Way

With all the fuss over the demise of HD DVD and the potential boost for the PlayStation 3 due to its built-in Blu-ray player, yesterday's announcement that Microsoft had signed up Paramount to its Xbox Live Video Store is all the more important.

For many, digital distribution rather than physical media represents the future of content consumption, so GamesIndustry.biz spoke to Xbox Live marketing manager in the UK, Robin Burrowes, to find out how the platform has been performing since it launched in December.

Robin Burrowes: It's been performing very well indeed. We're just two months into the life cycle from a UK point of view, and from indicators we're already beginning to receive, firstly we're performing above expectations, secondly we're very much skewing towards HD content - which is something we thought would happen, but we're actually surprised by the extent of it - and thirdly we're very much veering towards the newer of the titles that we've had on board so far.

Titles like 300, Ocean's 13, TMNT and Harry Potter and the Order of the Phoenix - they've done particularly well in terms of amounts of downloads. There's been a lot of partner satisfaction with where we are so far - I know that Warner are very happy with the performance, and hopefully that's something we'll bring forward with having Paramount on board as well.

Exactly. We are offering the choice, certainly on new titles, of both HD and SD. There tends to be more of a legacy issue with library titles because they were originally only ever made in standard definition.

What we've also found is that where we have library titles that have been reformatted in HD, such as the Matrix Trilogy, they have performed really, really well, and probably breathing a new lease of life into some old titles.

Yes, we did a lot of industry benchmarking prior to getting the price out there, so we were confident that, with the content that we've got on standard and high definition, that we called it appropriately.

Yes, they are - I mean, they're demanding consumers, they'd like more, and in time we'd like to think that the publishers we work with provide a different landscape for us to share their content with our audience.

So that's our position, but certainly there's high levels of satisfaction in terms of what we provide, and I guess there are probably benchmarks out there in the industry - some suppliers are just a one-off watch, and some provide potentially a longer window.

I think we're probably in the middle of the market in terms of the video on demand opportunity that people can have at the moment.

Yes, they are, and Paramount just allows us a lot more credibility in terms of the content, because ultimately consumers aren't so much interested in the studios themselves, but the content that the studios are providing.

Paramount had a great year in 2007 - they actually were the market leader in terms of market share for theatrical releases last year. The big plus point of the relationship is that we get the video on demand content in 2008 of all those great 2007 releases.

We're hoping some will win some Oscars, which will hopefully give them some more publicity, and depending on what those titles are we'll either have them or certainly be bringing them onto our platform throughout 2008.

Exactly, and what we've found, going back to a couple of footnotes in recent history, with the Xbox 360 being the first high definition console to make it into the market, we found that a lot of our audience would buy a high definition screen to enjoy the benefit of that content.

Our research is suggesting that upwards of 60 per cent of our audience has to have a high definition screen to consume this content on - to a certain extent it heralds the movement of consoles completely into the living room space, which is something that we want to continue to focus on in the future.

So our audience, and the broader audience that is probably the family, is the audience that's consuming the content in the living room through Xbox Live, and having Video Store as a key ingredient within the Xbox Live world - it'll really be cemented by the content that we're going to continue to provide.

Absolutely, from the kick-off. And what's helping from the current scenario is that the engaged Xbox Live audience, from the past, present and hopefully future as well, has been used to downloading digital content to support the retail purchases that they continue to buy.

I can't see it for the foreseeable future, and the context of that was really borne out by retail continuing to provide a solid access point and a solid infrastructure for consumers to buy tangible media.

2007 was probably the biggest year ever - the likes of Halo 3, Call of Duty 4 - and 2008 is shaping up again to be a very exciting retail landscape with imminent arrival of GTA IV and Rock Band arriving in the market place.

I think it's going to be an exceptional healthy year again at retail, and long may that continue as far as we're concerned at Microsoft.

No, no plans.